The $22 billion State Employees’ Credit Union of Raleigh, N.C. said Thursday it looks forward to “showcasing all we’ve been doing for consumers” now that it is the first state-chartered CU to formally come under regulatory purview of the new Consumer Financial Protection Bureau.
In action taken this week, the CFPB, created by last year’s Dodd-Frank Act, signed the first “memorandum of understanding” between a state CU regulator on regulation coordination and information sharing.
SECU is the only state-chartered CU that falls under Dodd-Frank rules directly covering CUs above $10 billion in assets. On the federal side, the $41 billion Navy FCU and the $14 billion Pentagon FCU are also in that category.
“We’re delighted to put forward all of our consumer-friendly initiatives on overdrafts, on NSF, text alerts, payday alternatives and so we see this very much as a positive,” said Leigh Brady, senior vice president of information services at the North Carolina CU.
In a ceremony Wednesday, Elizabeth Warren, head of the CFPB, and North Carolina Administrator of Credit Unions Jerrie Jay signed the first MOU dealing with agency coordination on SECU.
The CFPB was given exclusive authority by the Dodd-Frank Act to examine $10 billion CUs and banks and all nondepository institutions regardless of size for consumer protection compliance. The agency must coordinate its exam schedule with NCUA or state regulators and on that score the National Association of State Credit Union Supervisors said it has been working with the agency.
Also involved more recently has been the National Conference of State Bank Supervisors to chart future CFPB regulation on state banks.
The agency, set to get fully under way by July, has been in the midst of hiring staff, with one report stating that the agency will have 1,000 employees.
On Tuesday in an address before CUNA’s GAC meeting, Warren said the agency will be an ally to CUs and that the bureau will work with CUs “from the beginning.”
CUNA officials have pointed out that the $10 billion cutoff doesn't mean that other CUs will be hands-off to the bureau. Indeed, said CUNA, CFPB will have access to all examination reports, regardless of a credit union’s size or charter, so CUs can expect “more consistent and detailed consumer protection exams by their federal and state regulators.”